1974 Articles

The Brain Drain, International Integration of Markets for Professionals and Unemployment: A Theoretical Analysis

Bhagwati, Jagdish N.; Hamada, Koichi

These are useful insights into the problem of the ‘brain drain’. However, admittedly, the analysis is overly simple and could be extended in many directions. An obvious growth-theoretic extension would be to bring in savings behavior and maximization of welfare over time for those left behind. Or, within the confines of the Hicks-Samuelson model, the analysis could be enriched to allow for remittances from the emigrated people: an argument which qualifies the conclusions in favor of permitting the brain drain. The neoclassical model could further be extended fur/y in the direction of trade- theoretic models with factor movements: the effect of the labor migration on the commodity terms of trade of the labor-losing country could be readily analyzed along the lines of the recent Jones (1967) and Kemp (1966) contributions to the welfare theory of international capital movements.